Is Hecla Mining Company (NYSE:HL) a healthy stock for your portfolio? The smart money is becoming more confident. The number of long hedge fund bets advanced by 14 recently.
To most stock holders, hedge funds are perceived as worthless, outdated financial tools of the past. While there are more than 8000 funds in operation at present, we at Insider Monkey look at the top tier of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their top picks, we have deciphered a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, bullish insider trading activity is a second way to parse down the investments you’re interested in. As the old adage goes: there are a number of incentives for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).
Now, it’s important to take a gander at the recent action surrounding Hecla Mining Company (NYSE:HL).
What have hedge funds been doing with Hecla Mining Company (NYSE:HL)?
Heading into Q2, a total of 21 of the hedge funds we track were bullish in this stock, a change of 200% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Hecla Mining Company (NYSE:HL), worth close to $10.4 million, accounting for less than 0.1%% of its total 13F portfolio. On Royce & Associates’s heels is Pine River Capital Management, managed by Brian Taylor, which held a $9.9 million call position; 0.2% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Carl Tiedemann and Michael Tiedemann’s TIG Advisors, Eric Sprott’s Sprott Asset Management and D. E. Shaw’s D E Shaw.
As aggregate interest increased, key money managers have jumped into Hecla Mining Company (NYSE:HL) headfirst. Pine River Capital Management, managed by Brian Taylor, created the most outsized call position in Hecla Mining Company (NYSE:HL). Pine River Capital Management had 9.9 million invested in the company at the end of the quarter. Carl Tiedemann and Michael Tiedemann’s TIG Advisors also made a $5.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, J. Alan Reid, Jr.’s Forward Management, and John Thiessen’s Vertex One Asset Management.
How are insiders trading Hecla Mining Company (NYSE:HL)?
Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last six-month time frame, Hecla Mining Company (NYSE:HL) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Hecla Mining Company (NYSE:HL). These stocks are Endeavour Silver Corp. (CAN) (NYSE:EXK), Silvercorp Metals Inc. (USA) (NYSE:SVM), Coeur d’Alene Mines Corporation (NYSE:CDE), First Majestic Silver Corp (NYSE:AG), and Silver Standard Resources Inc. (USA) (NASDAQ:SSRI). This group of stocks are in the silver industry and their market caps resemble HL’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Endeavour Silver Corp. (CAN) (NYSE:EXK)||6||0||0|
|Silvercorp Metals Inc. (USA) (NYSE:SVM)||8||0||0|
|Coeur d’Alene Mines Corporation (NYSE:CDE)||12||1||0|
|First Majestic Silver Corp (NYSE:AG)||7||0||0|
|Silver Standard Resources Inc. (USA) (NASDAQ:SSRI)||11||0||0|
With the results shown by the aforementioned research, everyday investors should always watch hedge fund and insider trading activity, and Hecla Mining Company (NYSE:HL) applies perfectly to this mantra.